How to Stop Living Paycheck to Paycheck—Even Without Getting a Raise

Once, the phrase "living paycheck to paycheck" only applied to those in low-wage jobs with little opportunities to save and advance. But these days, "it’s clear that many folks with good-paying, full-time careers are now stuck in this trap," says Elle Kaplan, finance expert and founder of LexION Capital. Recent surveys back up Kaplan's claims, with one CareerBuilder survey showing that a whopping 75 percent of adults in the United States are doing this.

"Sometimes living paycheck to paycheck makes me feel like I'm swimming against a current," describes Morgan, a 35-year-old Athens, Georgia, resident, who says that she and her husband are swimming in student debt, despite both holding down very good jobs. "I know things could be much worse, and I'm grateful that we can at least pay our bills, have food on the table, and a comfortable place to live in," she says.

But as Kaplan points out, we're (kind of) doing this to ourselves. (Even Morgan admits there are things she could be doing to break the cycle.) Not all of us make enough money, but many of us do—and we're living paycheck to paycheck because of poor choices. But, "just like any other behavior," says Kaplan, "it’s possible to finally break free of the paycheck-to-paycheck treadmill by adjusting your habits."

Here, Kaplan and two other financial experts give their best tips on how to do just that.

Make a list of your subscriptions—then cut the cord.

As Onisa Treibs, vice president of Fidelity Investments’ Southlake Investor Center, points out, "we all share the reality of having bills to pay each month and a big range of expenses we face day in and day out." Everything from essentials, such as housing and paying the electric bill, to the "fun" stuff, such as wardrobe updates and even how often we join our friends for happy hour, add up. "We have so many things going on day to day that we may not be paying close enough attention to how these expenses—especially the little extras [that] wiggle their way in—impact our bottom line," Treibs says.

One of those little extras might just be your subscriptions, including to magazines or streaming services, such as Hulu or Netflix. So, "a few times each year, I review all the subscriptions and online payments I make automatically—technology, fitness, online subscriptions, and so on—and there is often one or two that I no longer use or need," says Leanne Jacobs, wealth expert and author of Beautiful Money: The 4-Week Total Wealth Makeover. And she suggests you do the same. "For some online subscriptions, there is often a cheaper alternative," Jacobs says. If there isn't, "call to ask if there is a pay-per-use option instead of a monthly automated fee. This can often save you hundreds—if not thousands—of dollars per year."

Don't rely on one income stream.

Don't have a side hustle? If you're living paycheck to paycheck, it might be time to get one. "In today's online marketplace, it is simple to start earning an additional income stream from a passion or skill," says Jacobs, who suggests you survey your financially savvy friends to see how they are generating some extra income each week. It doesn't have to be a part-time job, nor does it have to be as complicated as opening up an Etsy shop. When she needs some extra cash to help with her two mortgages and her car payment, 31-year-old Emily of Celina, Ohio, sells items around her house she's no longer using, like appliances or clothes her three kids no longer fit into. "It's small change, but it's helpful," she says.

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Make some savings goals.

"If you don’t know why you’re saving, or if you don't have an intrinsic motivation for stashing money away, saving often gets put on the back burner," says Kaplan. To stop living paycheck to paycheck, then, it helps to jot down goals for the money in your savings account. "The key is to get very specific," says Kaplan. For example: "How much do you have to invest to retire? Or, how much should you stow away to create an emergency fund?" Kaplan encourages you to ask yourself. "Realistic goals are the difference between dreams and accomplishments."

Do some easy math.

Maybe your problem is that you really can't wrap your mind around how a $3 coffee here and there is causing you to live paycheck to paycheck. If so, "think about your take-home paycheck each month," which is the amount you deposit into the bank after deductions for taxes, health insurance, and (hopefully) your retirement account, says Treibs. "Now divide that by 20—the average number of work days in a month," she says. "That gives you a rough estimate of how much you’re earning for a day of work. Then, the next time you’re about to pull out your credit card at the mall or agree to go out to dinner, do a quick calculation of how many days work it’s going to cost you—and that may just influence your choice."

Take a closer look at your taxes.

There are basically two ways to have more money in your bank account: Spend less or earn more. But in addition to your side hustle, you can earn some passive income by taking a closer look at your taxes, says Jacobs, and see if there are deductions you've missed. "There are likely at least two tax strategies that you are missing out on," she says. Of course, if you do have a side hustle, you can claim business-related expenses on your taxes—such as a portion of your cell phone bill to the insurance you carry on your car—which can lead to a lower tax burden and more money in your pocket at the end of the year. Just talk to a qualified accountant before you start itemizing your deductions to make sure.